JP Morgan Faces Another Hefty Fine, Traders Hit The Sell Button
Shares of JP Morgan (NYSE: JPM) were the laggard in the financial group Tuesday, down more than 1 percent after an agreement totaling $1.7 billion in charges was reached between the bank and victims in the Bernie Madoff fraud. The case was grounded in the relationship JP Morgan had held with Madoff since 1986. Within the deal, $543 million is to be allocated to the clients of the Madoff ponzi scheme, $218 million will be paid in a class-action consolidation settlement. JP Morgan is to pay $325 million to settle the Security Investors Protection Act.
The two motions filed Tuesday require court approval; however, Trustee of the SIPA, Irving Picard, is confident distributions will be made to the plaintiffs' in 2014.
To date Madoff investors have recovered 55 percent of the $17.5 billion lost by investors in the scheme.
The case is yet another issue for a firm which has faced litigation for decisions ranging from the manipulation in the housing crisis to insider trading. The litigation will set a new record as the largest fine stemming from a Bank Secrecy Act Violation.
Elsewhere in the sector, Bank of America (NYSE: BAC) shares closed down 0.96 percent, Morgan Stanley (NYSE: MS) shares were down 0.3 percent and Citigroup (NYSE: C) shares traded up about 0.7 percent to $54.18. The Select Sector Financial SPDR ETF (NYSE: XLF) closed 0.05 percent higher on Tuesday.
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